NEW YORK ( TheStreet) -- "This rally today was based on nothing, or at least nothing that was good," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.

He said simply that nobody trusts this market, and that makes rallies like today all the more painful.

Cramer said he's baffled by today's market action, especially given that all the news of the day was bad. He said that everything from employment to home building, financial regulation to the oil stocks was going against the markets today, but it rallied anyway.

"This is what I call a bad rally," said Cramer, "it's a rally caused by nothing more than shorts being out of position." Cramer characterized it as a rotating short squeeze, where short sellers are getting caught off guard amidst the market volatility and are forced to cover their positions. A rally like that, he concluded, can end on a dime.

Cramer went further to explain that after the "flash crash" in May, where the Dow sank 1,000 points, the character of the market changed. He said that the markets now seem downright ridiculous, trading on the news of the day, or sometimes no news at all, rather than on the fundamentals or long-term trends.

Cramer said that Washington is only making things worse, as it's focused on one thing and it's not jobs. He said that Washington's mantra is "punishment," punishment for healthcare, punishment for the banks, punishment for credit card companies, and now punishment for big oil.

About the only stocks that make sense in this market are the ones Cramer's been preaching about, high-dividend payers and those with high growth. Other than those stocks, it's anyone's guess.

Merger Benefits

In the "Executive Decision" segment, Cramer spoke with Glen Tullman, CEO of Allscripts-Misys Healthcare Solutions ( MDRX), a stock which has been under pressure since announcing a merger with Eclipsis, a leader in computerized hospital records.

Tullman explained that as part of the deal Allscripts' other partner, Misys, is reducing its stake in the company from 55% to just 10%. He said the resulting deal will be a bigger, and better, Allscripts with even more profitability.

When pressed further on why Misys is selling its stake in the company, Tullman explained that Misys took the opportunity to return value to its shareholders and help prop up its European banking business, which is in need of cash.

Tullman said that Allscripts with Ellipsis will see long term appreciation and $40 to $45 million of extra free cash flow per quarter as part of the deal. He said the company will also see $40 million a year in cost savings from synergies.

Tullman explained that Ellipsis brings computerized records to hospitals, which is a perfect fit for Allscripts, which mainly sells to physicians.

Cramer agreed, saying that the combined company is a healthcare records powerhouse, one that's a lot more powerful than the current company. He remained bullish on the stock.

Sweet Portfolio

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the charts of Cramer's high growth portfolio, first featured on June 3.

According to Collins, plotting these seven stocks against a chart of the S&P 500 shows the portfolio as having a strong, unbroken uptrend ever since the beginning of the year. He noted that a daily chart of these stocks' momentum shows that every time momentum dips to the 34-day moving average, its a great time to buy, a trend confirmed by the weekly chart as well.

Even when looking at the relative strength index, Collins said Cramer's C.A.N.D.I.E.S. are looking sweet. He even went as far to suggest that the market seems to depend on these stocks surging higher.

Cramer said Collins' technical analysis only proves what he deduced from the fundamentals: These seven stocks have pure, raw power.

Outrage of the Day

Cramer once again sounded off against the proposed Lincoln amendment to the financial reform package working its way through Congress. He said the amendment, which bans U.S. banks from offering hedging and foreign exchange protections against the bonds they're selling, will handicap our banks and allow foreign banks to take over.

"Let's call this amendment what it is, a bailout of European banks," he said. If passed, Cramer said this provision will deal a severe blow to the likes of Goldman Sachs ( GS) and JPMorgan Chase ( JPM), two stocks which he owns for his charitable trust, Action Alerts PLUS, as they would no longer be able to compete with the likes of Deutsche Bank ( DB) or Barclays ( BCS), which would be exempt from the rule.

Cramer said running against big corporates may be politically in favor, but this bill literally hands over investment banking to the Europeans. If it passes, he said, he'd be a strong buyer of Deutsche and Barclays, even after their huge rally today.

Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, clickhere .

At the time of publication, Cramer was long Apple, Bank of America, Intel, Goldman Sachs, JPMorgan Chase. Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

President Trump's move Thursday to cancel his meeting with North Korea leader Kim Jong Un sent the stock market into a "tizzy," according to TheStreet's founder and Action Alerts PLUS Portfolio Manager Jim Cramer.